Supply and quality issues will complicate the remainder of the California and Arizona lettuce deals, and prices should stay high as a result.
“What we predicted is happening — we’ve hit a gap, and the prices are reflecting it,” said John Burton, general manager of sales and cooler for Coachella, Calif.-based Peter Rabbit Farms.
On Jan. 13, the U.S. Department of Agriculture reported prices of $25.50-28.50 for cartons of film-lined 24s of iceberg from Arizona, up from $6.50-7.60 last year at the same time.
Henry Dill, sales manager of Salinas, Calif.-based Pacific International Marketing, didn’t expect markets to stabilize anytime soon.
“Right now the market’s pretty active on head and pretty much all leaf. Production is a fraction of what it was a month ago. There are potentials for gaps through the end of the month. It will be kind of sporadic.”
Pacific International, for instance, expects a gap on romaine and romaine hearts the week of Jan. 19 and a gap on head lettuce at the end of the month, Dill said. Other shippers will likely gap on different commodities at different times, he said.
Prices could stay high throughout the desert deals, Burton said.
“Long-term, the market could be strong throughout the southern deal because of lack of product.”
And if the beginning of 2015 continues to resemble the beginning of 2013, the reverberations could be felt even longer, Burton said.
“It could be a pretty good spring for us as far as price goes. But it’s been a tough season for quality.”
Looking ahead to the end of the desert deals and the beginning of production in Salinas and other areas, simple math points towards continued strong markets, said Jason Lathos, commodity manager for Salinas-based Church Bros. LLC.
“If you look at the remaining weeks left to ship in Yuma, it’s roughly 13 weeks,” Lathos said Jan. 12. “If you look at the acreage that’s left it’s roughly nine weeks. Similar to 2013. Bottom line is that we’ll finish lettuce before we go back to Huron, Santa Maria, Salinas.”
The other numbers to keep an eye on, Lathos said, are the ones on a thermometer.
“If we don’t have high ground temps it will continue to affect crops,” he said. “For the short term, if we don’t get any warm weather, we won’t see a lot of increases in lettuce volumes. Numbers for the balance of the Yuma season will be lower than budget, keeping markets higher than normal.”
Unseasonably warm weather earlier in the southern deals pushed harvests up two or three weeks, Burton said. Then, when temperatures plummeted, it threw another wrench into the season.
Quality-wise, that meant seeders on early product and burn and discoloration on cold-damaged product, Dill said.
Volumes wouldn’t likely get back to normal until February, Burton said. But that could depend on shippers exercising patience and not shipping product before it’s fully mature.
Shippers of romaine, which was hit harder by the cold than iceberg and leaf lettuces, will have to hope that Mother Nature doesn’t have more freezing weather in store, Burton said.
“It may be Feb. 10” when the romaine market returns to seasonal norms, Burton said, “but it’s anyone’s guess.”
Pacific International, which is sourcing from Coachella and Yuma, could wind down its Yuma deal two weeks early, Dill said.